5.1.1. Miscellaneous Collection Procedures

(1) This IRM section contains procedures, guidance, and information for revenue officers. The content includes clerical procedures, case closing letters, processing closed case files, and taxpayer identification number issues.

(1) IRC § 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights.

(2) IRC § 6330, Notice and opportunity for a hearing before levy.

(3) IRC § 6331, Levy and distraint.

(4) IRC § 7602, Examination of books and witnesses.

(5) 26 CFR 601.106 (Revenue Procedure 2012-18), Ex Parte Communications Between Appeals and Other Internal Revenue Service Employees.

(1) The Director, Collection Policy is the executive responsible for the policies and procedures in this IRM.

(2) Employees are responsible for following the provided guidance to process cases.

(1) IRM 1.4.50, Resource Guide for Managers, Collection Group Manager, Territory Manager and Area Director Operational Aid, requires group managers to observe and evaluate revenue officers for their ability to recognize and address third party contact situations. Security reports derived from Collection Information Technology & Security (CITS) are issued to managers to resolve any potentially questionable accesses. National Quality Review System (NQRS) and Embedded Quality Review System (EQRS) case quality reports are also provided for managers to review.

(2) Program Effectiveness. Managers and National Quality staff conduct reviews using the EQRS system. Senior managers conduct operational reviews. Accuracy and timeliness of case processing as well as protection of taxpayer rights are considered in these reviews. Unit security representatives (USRs) review IDRS security reports and address issues as appropriate.

(1) Program controls exist to oversee the programs. Case closing letters are generated systemically in certain cases. IDRS profiles for revenue officers are restricted. IDRS creates an audit trail of actions taken.

(1) The table below lists commonly used acronyms and their definitions referenced throughout this IRM:

(1) IRM resources include:

• IRM 5.1.2, Remittances, Form 809 and Designated Payments

• IRM 25.3.2.6, Revenue Officer Referral and Account Disposition

• IRM 5.16.1.2, Currently Not Collectible Procedures

• IRM 1.4.50.9.2, Group Hold Files

• IRM 5.16.1.2.9, Hardship

• IRM 1.4.50.11.7, Closed Case Transmittals

• IRM 4.1.21, LB&I Planning and Special Programs, Planning and Monitoring

• IRM 5.1.12.24, Indian Tribal Governments

• IRM 5.1.9.3.5.1, Levy Action during the Period of the CDP or EH

• IRM 5.8.1.16, Withholding Collection

• IRM 5.14.1.5, Levy Restrictions and Installment Agreements

• IRM 5.1.9.3.5, Collection Action during the Period of the CDP or EH

• IRM 5.1.9.5, Communications with Appeals

• IRM 5.4.12, Field Office Resource Team

• IRM 5.4.12.2.1.2, General Case Processing Referrals

• IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria

• IRM 21.3.4.9, Tax Law Assistance

• IRM 21.3.4, Field Assistance

• IRM 21.3.4.2, Standard Services in a Taxpayer Assistance Center (TAC)

• IRM 21.3.4.9.2, Tax Law Referral Procedures

• IRM 21.3.4.12.2 Account Referral Procedures

• IRM 2.3.12, Command Code ACTON

• IRM 5.1.25.2.1, Managers of IDRS Users

• IRM 5.1.3.8.1, Separation of Duties

• IRM 5.1.2.7.3, Separation of Duties - Form 809

• IRM 5.1.3.7.5, Taxpayer Browsing Protection Act

• IRM 10.5.5, IRS Unauthorized Access, Attempted Access or Inspection of Taxpayer Records (UNAX) Program Policy, Guidance, and Requirements

• IRM 2.3.59, Command Code BMFOL and BMFOR

• IRM 2.3.15, Command Code ENMOD

• IRM 5.16.1, Currently Not Collectible

• IRM 5.1.12.21, Refund Offset

• IRM 25.27.1, Third Party Contact Program

• IRM 25.27.1.3.1, TPC Notification Procedures

(2) Web resources include:

• Taxpayer Bill of Rights: https://irssource.web.irs.gov/SitePages/TaxpayerBillOfRights.aspx

• Interactive Tax Law Assistant: http://serp.enterprise.irs.gov/databases/irm-sup.dr/current/itla/itla-home.htm

• AIMS/ERCS Contacts: http://mysbse.web.irs.gov/examination/mis/contacts/default.aspx

• Post of Duty List: http://serp.enterprise.irs.gov/databases/who-where.dr/post-of-duty/post-of-duty.html

• IRS Fed-State Program: https://portal.ds.irsnet.gov/sites/vl003/lists/governmentalliaison/DispItemForm.aspx?ID=1

(3) The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://irssource.web.irs.gov/SitePages/TaxpayerBillOfRights.aspx.

(1) To the greatest extent practicable, limit printing and photocopying. Improvements in automated document processing and storage have greatly reduced the need to produce hard copies. IRMs and most internal management documents (IMDs) are now available on line. Before printing documents or making photocopies, consider whether there is a true need for a paper document.

(2) Make photocopies for the case file of original documents that must be returned to the taxpayer or third parties.

(3) If you need to print or make photocopies in the field, claim any photocopy or printing fees on your travel voucher.

(4) Provide a receipt for documents if requested to do so by a taxpayer or representative using the following procedures:

1. Make a photocopy of the document.

2. Use the "official received date stamp" to stamp the photocopy of the document.

3. Provide the stamped copy of the document as a receipt for the document to the taxpayer.

(1) In deciding whether to mail or fax documents to taxpayers, third parties or other IRS employees, revenue officers need to assess the costs of each method, including the volume of documents and time required, the urgency involved, taxpayers' preferences, security issues, and, most important, any relevant statutory requirements. For example, some documents may only be delivered in person or by certified mail.

(2) Faxing documents with several pages is generally not advisable since fax transmission rates and quality vary considerably with the fax machines on both sides of the communication. Also, faxing several documents ties up office fax machines.

(3) Fax and E-Fax of tax or Privacy Act information should be used only in situations where the authorized recipient has approved the use of the faxing method for the information involved. See IRM 11.3.1.14, Facsimile (FAX), Electronic Facsimile (E-Fax), and IRS Internal Enterprise Electronic Facsimile (EEFAX) Transmission of Tax Information, for additional guidance on facsimile transmissions of tax or Privacy Act information.

(4) In order to protect the confidentiality of tax or Privacy Act information, a cover sheet identifying the intended recipient and the number of pages must be used. Form 10321 Fax Transmission Cover Sheet, is the standard fax cover sheet. The fax cover sheet should be addressed to the authorized third party and should not include the taxpayer’s name, TIN, or other confidential information. If the intended recipient of the fax is the taxpayer, it is permissible to include the taxpayer’s name and phone number. If the fax is being sent to an authorized third party, the fax cover sheet should be addressed to the authorized third party and should not include - the taxpayer’s name, TIN, or other confidential information. The information should be faxed in a manner where the cover sheet will be the first page recovered from the faxed information.

(5) The following confidentiality statements should be included on all fax cover sheets:
"This communication is intended for the sole use of the individual to whom it is addressed and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. If the reader of this communication is not the intended recipient or the employee or agent for delivering the communication to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication may be strictly prohibited. If you have received this communication in error, please notify the sender immediately by telephone call and return the communication to the address above via the United States Postal Service. Thank you."

(6) Refer to specific IRM mailing guidelines to determine the most appropriate and efficient methods. See IRM 5.1.1.3.2.1 and IRM 5.1.1.3.2.2 below for guidelines on the most appropriate IRS envelopes to use.

(1) When all ICS modules are closed as a CNC-Hardship or by transactions resulting in Status 12, ICS will automatically generate a case closing letter upon closure.

(2) Print and mail the case closing letter(s) in accordance with local procedures.

(1) If the case has already closed on ICS, then generate a case closing letter by selecting the appropriate letter from the ICS Template menu:

1. Manually enter appropriate entity and address information.

2. Manually enter the module information in the template grid.

3. Manually update the ICS history to indicate that a case closing letter has been generated and mailed.

(2) Generate a copy of the letter for the power of attorney (POA), as applicable.

1. Answer "Yes" to the question: "Do you want to generate a POA letter?"

2. Enter the appropriate POA information in the ICS Template grid.

   Note: Letter 937, Transmittal Letter For Power of Attorney, and another copy of the letter(s) will be generated for mailing to the POA.

(3) Print and mail the case closing letter(s) in accordance with local procedures.

(1) Taxpayer dealings with the IRS should be organized and well managed. Coordination will provide a perception of "one IRS" to the taxpayer, which will also be a benefit to the IRS when:

1. The revenue officer (RO) works closely with the examiner (revenue agent (RA) or other employee), and/or

2. The examiner works closely with the RO.

(2) When the RO works closely with the examiner (RA or other employee), the examiner should be fully informed of the RO's case actions and be able to do the following:

1. Appropriately respond to any inquiry(ies) from the taxpayer.

2. Respond promptly to the RO's request for any necessary records and documentation.

3. Resolve the examination issues and close the case efficiently.

(3) When the examiner (RA or other employee) works closely with the RO, the RO will be fully informed about the taxpayer and will be able to do the following:

1. Respond promptly to the examiner's request for any necessary records and documentation.

2. Secure a prompt response to any request for necessary records and documentation from the examiner.

3. Appropriately respond to any inquiry(ies) from the taxpayer.

4. Resolve the collection issues and close the case efficiently.

(1) The AIMS assignee code (AAC) is a 12-digit code that is used for the management structure so that returns and time applied to returns can be applied to the correct location for management information reports. The AAC is displayed on page two of AMDISA. The AAC is broken down into the following three fields:

• PBC (primary business code)

• SBC (secondary business code)

• EGC (employee group code)

(2) Review your cases for other BOD or business unit involvement, including Appeals.

(3) Research IDRS command code (CC) AMDISA to determine if an examination is open on your IMF, BMF, or EPMF taxpayer.

1. Look for TC 420 (Examination Indicator).

2. Look for an open "—L" freeze (AIMS Indicator — Account selected for audit freeze is set by posting TC 420/424 -- module frozen).

(4) Look up the assigned group on AMDISA when your case has a related examination open. The AAC is for use by all BODs.

1. See Document 6036, Examination Division Reporting System Codes Booklet, for information on the position code, employee status, and AIMS assignee code (AAC).

2. Use the EGC to determine the assignment.

3. Obtain more specific information, such as group manager, address, and phone number of a group represented by an EGC, as needed, at: http://mysbse.web.irs.gov/exam/mis/contacts/empgroupcode/default.aspx.

(5) Follow any locally established procedures, if applicable, to coordinate with the assigned examiner, as needed.

(1) Research CC AMDISA to determine if the return is assigned to LB&I. A return assigned to LB&I will be assigned a primary business code (PBC) 30X.

(2) Determine if the LB&I case is a coordinated industry case (CIC) or an industry case (IC). See IRM 4.46.2, LB&I Guide for Quality Examinations, Administrative Matters and Annual Compliance Plan, for procedures for all LB&I cases, including both coordinated industry cases (CIC) and industry cases (IC).

1. The case is a CIC taxpayer if a "CIC" indicator is reflected on the AMDISA.

2. The case is an IC taxpayer if an "IC" indicator is reflected on the AMDISA.

(3) Coordinate with the RA assigned to the related return according to the procedures displayed in the following table when you determine that a case assigned to you also has a return open for examination in LB&I.COORDINATION with LB&I

(1) Research CC AMDISA to determine if the return is assigned to SB/SE. A return assigned to SB/SE will show primary business code (PBC) 2XX.

(2) Coordinate with the examiner assigned to the related return, as needed, when you determine that a case assigned to you is also open in SB/SE for examination, to facilitate appropriate response(s) to any inquiry(ies) from the taxpayer and to resolve any issue(s).

(1) Research CC AMDISA to determine if the return is assigned to TEGE. A return assigned to TEGE will show primary business code (PBC) 4XX.

(2) Coordinate with the examiner assigned to the related return, as needed, when you determine that a case assigned to you is also open in TEGE for examination, to facilitate appropriate response(s) to any inquiry(ies) from the taxpayer and to resolve any issue(s).

(3) On cases involving Indian tribal governments, refer to IRM 5.1.12.24, Indian Tribal Governments.

(1) Collection refers tens of thousands of cases to Appeals each year through appeal programs and processes such as Collection Due Process (CDP), Alternative Dispute Resolution (ADR), Fast Track Mediation (FTM), Post Appeals Mediation (PAM), rejected Offer in Compromise (OIC), proposed Trust Fund Recovery Penalty (TFRP) assessments, Penalty Appeals, and Collection Appeal Program (CAP).

(2) The Internal Revenue Code (IRC) prohibits or restricts levy in many instances while certain appeals are pending.

1. IRC 6330(e), Suspension of collections and statute of limitations, generally prohibits levy on a tax period for which certain CDP matters are pending. See IRM 5.1.9.3.5.1, Levy Action during the Period of the CDP or EH, for additional information.

2. IRC 6331(k), No levy while certain offers pending or installment agreement pending or in effect, generally prohibits levy (a) while an OIC is pending, (b) while an Installment Agreement (IA) is pending or in effect, (c) for 30 days after the rejection of an OIC or IA along with any period an appeal of the rejection is pending, and (d) for 30 days after the termination of an IA along with any period an appeal of the termination is pending. See IRM 5.8.1.14, Withholding Collection, for additional information on general levy restrictions while an OIC is pending, and IRM 5.14.1.5, Levy Restrictions and Installment Agreements, for additional information on general levy restrictions concerning IAs.

(3) A taxpayer may owe liabilities for multiple periods. However, not all these liabilities may be under the jurisdiction of Appeals. This is especially true with CDP cases. IRC 6330 requires Appeals to consider alternatives to a proposed levy action, such as an IA, OIC, or a request to have the account placed in Currently Not Collectible (CNC) status. These alternative collection actions generally apply to all outstanding tax debts, regardless of whether they are the subject of the CDP hearing.

(4) The following table provides information about potential indicators of Appeals involvement in a case and the possible need for coordination with Appeals before proceeding with collection activities:

(5) Contact with Appeals is limited by the ex parte provisions under Rev. Proc. 2012-18, so careful review of the IRM is required.

(6) Review the following IRM sections carefully before contacting Appeals to discuss a case in order to avoid potentially prohibited ex parte communication.

• See IRM 5.1.9.3.5, Collection Action during the Period of the CDP or EH

• See IRM 5.8.1.14, Withholding Collection

• See IRM 5.1.9.5, Communications with Appeals

(1) The master file is capable of systemically generating most normal interest calculations and some restricted interest calculations.

(2) There are four specific master file freeze codes that are directly related to module conditions restricting the computation of interest. The following is a list of the four freeze codes.

(3) Locate the code on the account transcript (TXMOD) following the acronym "FRZ>."

(1) This IRM section provides guidance regarding Field Collection (FC) employees detailed to the walk-in counter. From time to time, a Collection employee who works in a post of duty (POD) where a TAC is located may be called upon by FA to help staff the TAC. Generally, the TACs attempt to provide counter coverage for each other, especially because Collection employees are restricted from being in the work area controlled by the TAC, so details to the TAC should not happen often.

1. Use of the Interactive Tax Law Assistant (ITLA) is mandatory for all FA employees and detailees when answering tax law questions. Refer to IRM 21.3.4.3.4, Tax Law Assistance, for more information.

2. Other reference materials provide information about and instructions for numerous situations.

(2) The other reference materials necessary to help staff the TAC include the current versions of the following:

1. IRM 21.3.4, Field Assistance, links to the other relevant sections of the IRMs that FA uses to resolve customer inquiries.

2. Publication 17, Your Federal Income Tax.

3. Document 6209, IRS Processing Codes and Information.

(3) To prevent scheduling conflicts, TACs must provide as much advance notice as possible when FC assistance is required, particularly in smaller PODs.

(4) Group managers must follow these procedures when assigning a revenue officer a detail to staff the TAC: The manager must ensure that the detailed employee:

1. Is a well-trained revenue officer (RO) who has completed basic and on-the-job training.

   Note: Do not detail a RO trainee to staff the TAC .

2. Receives all appropriate reference materials

3. Does not have a scheduling conflict during the time assigned, either a scheduled appointment with a taxpayer or a personal appointment.

   Note: Do not require an RO with a scheduled appointment with a taxpayer to cancel or reschedule that appointment in order to be able to staff TAC.

(1) IDRS will generate or suppress, as required, the various notices to be issued to taxpayers upon establishment of an account receivable or a delinquency filing condition.

1. Balance due (BAL DUE) accounts are established at the time assessments are made and BAL DUE modules are updated with subsequent activity.

2. Delinquent return (DEL RET) accounts are established when a delinquency condition is determined.

3. IDRS will generate balance due accounts and return delinquency investigations to the Automated Collection System (ACS). IDRS will also generate Integrated Collection System (ICS) BAL DUEs, DEL RETs, follow-up notifications, and related information to the applicable FC offices, reflecting current actions not known by the responsible unit on assigned cases.

(2) The IDRS database is kept current in four ways:

1. It is updated weekly with data extracted from the Enterprise Computing Center (ECC) master file and NMF to reflect the latest posted taxpayer account information. (For IMF accounts identified as "Daily,” the IDRS database is updated on a daily basis.) The daily indicator is located under CC IMFOL definer "E" on line 14. A "0" indicates weekly and a "1" indicates daily.

2. It is updated immediately when terminal input data is posted.

3. IDRS memorandum information is gathered daily from the campus and field office transaction files while the data are still in the pipeline to the ECC for posting to the master file.

   Note: This memorandum information is carried in the data base as pending transactions until processed information is available from the next weekly updating of the master files.

4. IDRS is updated daily with uploads of certain transactions input to ICS.

(1) When transactions are sent to the master file, certain checks are automatically performed to prevent incorrect information from posting. The following table describes actions related to unpostable name control issues:CORRECTIVE ACTIONS: UNPOSTABLE CONDITIONS

(2) Sometimes, you may contact the campus employee who is working on the unpostable transaction before he/she contacts you. Regardless of whether a TE contacts you or you contact a TE, when you encounter an unpostable transaction, you must communicate with the TE to resolve the unpostable transaction. Sometimes, you may not be able to resolve the unpostable transaction. In that case, you must elevate the situation through your manager.

(1) Name control and Social Security Number (SSN) are checked for validity against records furnished to the Enterprise Computing Center (ECC) by the Social Security Administration (SSA). An asterisk (*) appearing to the immediate right of the SSN on BAL DUEs, DEL RETs, or OIs, indicates the SSN is invalid. The following table addresses certain SSN/name control mismatches:SSN/NAME CONTROL MISMATCHES

(1) When a proprietor has records on both IMF and BMF:

• The IMF records are under the proprietor’s SSN, and

• The BMF records are under the proprietor’s EIN.

(2) Even though the BMF records are stored and retrieved using the EIN, there is a secondary identification number field for the proprietor’s SSN.

(1) See IRM 25.27.1.3.1 for third-party contact (TPC) advance notice requirements and procedures.

(2) When Revenue Officers intend to contact third parties with respect to the determination or collection of a tax liability of a taxpayer, they must verify the taxpayer was issued an advance third-party contact notice letter that describes the intent to contact third-parties and establishes a time frame for the intended third-party contacts occurring after August 15, 2019 in accordance with IRC § 7602(c)(1). Perform IDRS and/or ICS research first to verify the issuance of advance third party contact notice by identifying transaction code (TC) 971 action code (AC) 611 posted on an IDRS module. Additionally, the Revenue Officer will need to ensure the appropriate revision of the advance third party contact notice letter was issued by reviewing the steps below:

1. In ICS, access the balance due module summary screen, click 'module detail' then click 'view TC 971/972 transactions', for the TC 971 AC 611 posted after August 15, 2019 associated with the mailing of Letter 3164 (July 2019 or later revision).

2. In ICS, access the delinquent return summary screen, click 'module detail' then click 'view transactions' for the TC 971 AC 611 posted after August 15, 2019 associated with the mailing of Letter 3164 (July 2019 or later revision).

3. After August 15, 2019, do not use IDRS systemically generated TC 971 AC 611 associated with the inclusion of Publication 1, Your Rights as a Taxpayer, issued in conjunction with CP-518 (for delinquent return modules) or CP-504 (for balance due modules) as Publication 1 no longer satisfies the requirements of advance third party contact notice pursuant to IRC § 7602(c)(1). Conversely, IDRS modules with a TC 971 AC 611 associated with the mailing of a Letter 3164 (July 2019 or later revision) satisfy the advance third party contact notice requirements. .

(3) There are four versions of Letter 3164 available for use by collection employees:

1. Letter 3164- A for trust fund recovery penalty (TFRP) investigations.

2. Letter 3164- B for balance due investigations.

3. Letter 3164- X for delinquent return investigations.

4. Letter 3164-W for transferee investigations.

(4) ICS generated Letter 3164 (July 2019 or later revision) satisfies the requirements of IRC § 7602(c)(1) to provide advance notice of third-party contacts to taxpayers. ICS will upload the TC 971 AC 611 on all IDRS modules assigned. However, if the module is an ICS only created module the ROs will need to prepare Form 4844, Request for Terminal Action, to identify the modules and the mailing date of the Letter 3164.

(1) See IRM 25.27.1.4, Reporting and Recording TPCs, for general TPC reporting and recording procedures and preparation of Form 12175, Third Party Contact Report Form.

(2) ICS systemically generates TPC data and updates the TPC command code database.

(3) Usually, the Form 12175 will not need to be completed by Collection personnel. Exceptions, however, are manually prepared levies, trust fund recovery penalty Investigations, jeopardy and other Investigations, templates or documents created in Word.

(4) For TFRP investigations, complete a separate Form 12175 for the business and each potentially responsible person. Use MFT 55 for the potentially responsible person and the business tax periods included in the assessment. Complete a separate Form 12175 for each contact when multiple contacts are made with the same third party on different dates. Complete one Form 12175 for multiple contacts with the same third party on the same day by the same employee.

(5) Notify the third party contact coordinator when a Form 12175 has been generated either by ICS or manually, and there was no third party contact. For example, a levy that was not delivered. For more information on how to contact the Third Party Contact Coordinator, please refer to: https://portal.ds.irsnet.gov/sites/vl051/Lists/ThirdPartyContacts1/DispItemForm.aspx?ID=10 .

(1) See IRM 25.27.1.3.2, Exceptions to IRC 7602(c) Notification Requirements, for general information concerning exceptions to TPC notification and reporting requirements.

(2) IRC 7602(c)(3) provides for four situations when the IRS is not required to give the taxpayer advance general notice or to include a particular TPC on the list of TPCs provided to the taxpayer. The exceptions are:

• Reprisal – follow guidelines in Chapter 29 of the ICS User Guide for the use of the ICS Pick List to indicate a reprisal situation exists.

• Taxpayer authorizes TPC.

• Jeopardy - If you determine that providing the taxpayer with the advance general notice or a record of a specific contact would jeopardize the collection of any tax liability (e.g., jeopardy levy), take the following actions:
  • Document the case file with specific information about the third party contact.
  • Document the case file with the basis for the jeopardy determination.
  • Complete Form 12175 but do not forward it to the third party contact coordinator.

• Pending criminal investigation.